The Mississippi Bubble. The Mississippi Company is a French company, listed in Paris, which aims to colonize the lower Mississippi Valley, with its headquarters in New Orleans. Its shares are initially priced at 500 livres, then on August 1, 1719, they rise to 2,750 livres, on August 30, to 4,100 livres, on September 4, to 5,000 livres, and on December 2, to 10,000 livres. Euphoria sweeps Paris, and huge profits are rumored. A few days later, some wealthy speculators, believing the price to be unrealistic, begin selling large amounts of their shares. Panic quickly spread. The government intervenes, buying up shares and dipping into its reserves. The price plummets from 10,000 to 1,000 livres; the state is left with no money and a pile of worthless shares. Wealthy investors escape only slightly, having withdrawn in time, and the bourgeoisie pays the highest price. The French financial system suffers a blow and will never fully recover. Much of the French North American Colonial Empire falls into English hands. Louis XV’s successor, Louis XVI, will realize that a large portion of his finances are going to pay interest on loans, and will convene the Estates General to find a solution, for the first time in a century and a half. This will begin the French Revolution.
